If you don’t have much by way of income growth, then there are other less desirable options for spending sources. There are “entitlements” or transfers and then there is debt. In the current age, the federal government has been responsible for originating and disbursing the vast majority of consumer credit in the form of student loans, in what is really [...]
The juxtaposition could not be more fitting with all that is transpiring at this moment in economic history. On Monday, the headlines were filled with, Black Friday Fizzles as Sales Tumble 11% and ‘Black Friday’ Fades as Weekend Retail Sinks 11%. Then the “employment” report comes out and now the headlines are, More Jobs and Higher Wages: U.S. Recovery Starts [...]
If “investors” have notoriously short attention spans, then surely those in and of Europe are making a case to be classified as something entirely new, different, and worse. It is now just one day shy of six months ago that the latest central bank schematic was unleashed to the universal cheer of “markets” and economists alike. The ECB wasn’t fooling [...]
Back at the end of August, it was becoming clear that there was a growing sense of maybe not distrust but far less blind faith emanating from credit markets all over the world. Without a single epicenter it has been far more difficult to simply side step all economic permutations as singularly important, rather the culmination of increasing worry is [...]
Like economic accounts, corroboration is imperative in “market” signals as well. That is true not just because some of these indications are self-referential but because broad agreement across various segments precludes idiosyncratic explanations and factors. If everything, or nearly so, is moving in the same direction at the same time to the same magnitude you simply cannot ignore it. In [...]
I’m not sure what basis there is for expecting a robust holiday season. Even factoring the move in the unemployment rate and upward revisions to GDP in the past two quarters, none of that has done anything toward correlating with rising income. In fact, 2014 is conspicuous in that aspect more than at any time during this “recovery.” The latest [...]
There is an undoubted shift in the behavior of consumers, including and especially during the peak retail season between Thanksgiving and Christmas. However, to say that is the sole reason for the decline in actual sales volume is to stretch that truth into (in many cases intentional) utter misdirection. The initial indications from the retail outlets are so far beyond [...]
I usually ignore sentiment surveys as, to reiterate one more time, they do not mean what people think they mean (and certainly not how they are used). The ISM Manufacturing Survey, for example, has been on fire for most of 2014 in an almost exact mirror of 2011. And just like 2011, that told us very little about the state [...]
If payrolls were indeed expanding at a robust clip, then we should be able to look forward to a Christmas retail season more like pre-crisis than anything of the past few years (especially last year). Of course, most initial indications of expectations for spending actually seemed favorable to such an outcome, which may not have been surprising either way since [...]
There is so much depth that is missing from the ongoing discussion about the state of “markets” as the Federal Reserve purportedly moves toward “normalizing” its regime. That isn’t all that surprising given that most people still have never heard of these various moving parts, and certainly cannot easily grasp the concepts without some degree of studied initiation. While you [...]
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