On June 15, 2007, not even two months before worldwide panic would break out, Federal Reserve Chairman Ben Bernanke was in Atlanta, Georgia, speaking at a monetary policy conference. Sponsored by the Atlanta branch of his organization, as fate would have it Bernanke’s chosen topic was the credit channel for monetary policy. This is something the scholar Bernanke supposedly knew [...]
What most Economists “learned” from the Great Inflation was how important psychological factors had become. You would think that such a huge monetary disconnect would teach especially monetary officials the importance of monetary competence. However, as Upton Sinclair once wrote, paraphrasing, it’s difficult to get a central banker to understand money when his paycheck can be saved by blaming you [...]
For years, realtors have been waiting for more housing inventory. It had become an article of faith, what was restraining a full-blown recovery was the lack of units available. The level of resales like construction was up, but still way, way less than it was now fourteen years past the prior peak despite sufficient population growth to have absorbed the [...]
We can add realtors to the list of those who are angry with Jay Powell. The housing market continued its perplexing slump in October, according to a broad section of data encompassing everything from construction to sales of existing homes. We have been told since Economics 101 that the central bank is, well, central, therefore it is easy to infer [...]
We will hear all day and for the next month (at least) about the two best quarters of GDP growth in four years. Somehow this will be used to justify calling this an economic boom, even though those two quarters in 2014 supposedly didn’t qualify. And they were better quarters, at least so far as real GDP goes. Knee-jerk reactions [...]
The housing slump accelerated in September. Matching the poor performance of resales, sales of newly constructed houses tumbled last month, too. According to the Census Bureau, there were 41k (unadjusted) single-family units sold. That’s down an alarming 18% from the same month last year. At a seasonally-adjusted annual rate of 553k in September, the construction market is down for now [...]
Stocks have stumbled into October with the S&P 500 down about 6% as I write this. The source of equity investors' angst is always hard to pinpoint and this is no exception but this correction doesn't seem to be due to concerns about economic growth. At least not directly. The most common explanation for the pullback in stocks - 6% [...]
If it wasn’t before, it is definitely a slump now. The National Association of Realtors (NAR) said today that the sales of existing homes across the US in September 2018 fell more than 3% seasonally-adjusted from August. At just 5.15 million (SAAR), that’s the lowest volume in almost three years. Hurricane Harvey had managed to disrupt a good chunk of [...]
Jay Powell is on the warpath, he thinks. Some aren’t so sure, though. At his last press conference, the one held on September 26 after the last “rate hike”, someone in the media actually asked him about the impact of rising interest rates. And not in a good way. His answer would apply to a broad cross section of the [...]
The global economy was in very rough shape in 1980. Caught in the spiral of the Great Inflation, there was practically nowhere to hide from ripping upheaval – beyond just the economic problems. Despite trying seemingly everything for an entire decade, nothing Economists came up with would rebalance the system. They kept saying they only needed time for their schemes [...]
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