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Tag Archives: economy

Consumer Financial Protection Bureau student-loan ombudsman Rohit Chopra: “student loan debt [crisis] could even hold back a housing recovery”

Caption: Self-inflicted.

More on the student loan debt crisis by Martha C. White in a Time Magazine Business & Money blog burst titled Student Loan Debt Crisis: How’d We Get Here and What Happens Next?

[...] The broader economic implications are troubling. Graduates struggling to dig out from a mountain of student debt also tend to put off getting married, buying homes, and having kids. And since a bigger chunk of their income will go towards servicing the mortgages or car loans they are able to obtain at higher rates, they’ll have less spending power when they do eventually buy big-ticket items like homes and cars. Consumer Financial Protection Bureau student-loan ombudsman Rohit Chopra warned last year that the magnitude of student loan debt could even hold back a housing recovery. “Student-loan borrowers are sending big payments every month to their loan servicers rather than becoming first-time homebuyers,” he said [...]

The era of cheap money in the form of super-low interest rates that incent debt over equity or savings is killing not just our economy but entire generations in the form of elderly who cannot live on their savings, under-performing pension funds, and our future economy in the form of our debt-slave university graduates who can’t find jobs anyway.

Good times!

yours &c.
g.

U.S. Economy contracts for first time since 2008

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  1. Just yesterday Lisa Mahapatra of Business Insider announced the “dawn of a new stock market super-cycle”

  2. We Could Be Witnessing The Dawn Of A New Stock Market Super Cycle

    Despite its huge rally from its March 2009 low, the stock market has effectively gone sideways for the last decade. Many have characteriz…
    Lisa Mahapatra
    ·

    Today the laws of physics issue their verdict on the DOW and only the latest bubble caused by the cheap money of low interest rates. Witness:

  3. US economy shrinks 0.1 pct., first time in 3 ½ years; deep cut in defense spending key factor

    The surprise contraction could raise fears about the economy’s ability to handle tax increases that took effect in January and looming sp…
    Associated Press
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  4. GDP report: U.S. economy contracts in the fourth quarter of 2012

    Uncle Sam cut spending in the fourth quarter of 2012, causing the U.S. economy to contract for the first time in more than three years. G…
    Cnn
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  5. Economy in U.S. Unexpectedly Shrinks as Defense Spending Plunges

    The economy in the U.S. unexpectedly shrank in the fourth quarter, restrained by the biggest plunge in defense spending in four decades a…
    Bloomberg
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  6. Advance Estimate of GDP for the Fourth Quarter of 2012 | The White House

    According to the “advance” estimate released by the Bureau of Economic Analysis today, real GDP edged down 0.1 percent at an annual rate …
    WhiteHouse.gov
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  7. Economy Shrank 0.1% in the Fourth Quarter; Analysts Expected Growth of 1.0%

    Kick Images | Getty Images This is a breaking news story. Please check back here for updates. Economists expected the first reading on gr…
    Cnbc
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  8. News Release: Gross Domestic Product

    Data on gross domestic product (GDP), personal income/outlays, corporate profits, fixed assets, government receipts/expenditures. Plus in…
    Bea
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  9. U.S. Private-Sector Jobs Rise by 192,000

    Private businesses added new employees at a rapid clip in January despite layoffs at the largest U.S. companies, according to a tally of …
    Wsj
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Paris is the New Athens as France enters economic death-spiral

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  1. The euro crisis no one is talking about: France is in free fall

    The euro zone’s second-largest economy is suffering more than any other member from a shocking deterioration in competitiveness. And it’s…
    Shawn Tully, senior editor-at-large
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  2. Sorry, but Europe’s Economic Crisis Is Not Over

    Financial conditions in Europe are improving, and the sense of imminent doom has lifted. Some commentators are daring to say that Europe’…
    Bloomberg
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  3. Frankrupt Damage Control “France Is A Truly Solvent Country, France Is A Truly Credible Country” | Zero Hedge

    In a move farcically reminiscent of Inspector Clouseau, the French Finance Minister made an impromptu appearance on the BBC to confirm wh…
    Zerohedge
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  4. Mish’s Global Economic Trend Analysis: France “Totally Bankrupt” Says Labour Minister; Inappropriate or Inaccurate?

    Mish’s financial blog covers global news and macroeconomic events regarding the world economy. The blog’s primary focus is inflation, def…
    Blogspot
    ·

the system will persist until the very moment it does not: how the progressive position on debt, deficits, and entitlement reform, is at odds with the laws of physics

The U.S. President in his second inaugural address issues the following contradiction: “We must make the hard choices to reduce the cost of health care and the size of our deficit. But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.” The solution to resolve this contradiction seized on by the courtier-classes of press and commentariat has been to emphasize that (a) the electorate endorses the system as it stands, and (b) the system as it stands is threatened not by debt, not by deficit, nor by market registers of the performance of nation states or other polities (What crisis?).

Caption: Wait. That should read Now Here, as in, you are now here, right?

Both (a) and (b) are true on their face, just as it is true as I write this that the weather is cold. But for how long, as the days are even now growing longer? At some point a combination of incremental, quantitative changes will produce the qualitative change of a change in seasons. Let us explore an example of the reasoning of the centre-left on the issue of entitlement-reform. In a Political Animal blog burst titled Four years later, Paul Ryan wants more of the same, Samuel Knight writes: Read More »

Tyler Cowen of the NYT: In the second quarter this year, [the U.S. Bureau of Labor Statistics] reported, nonfarm [U.S.]business labor productivity fell by 0.3 percent, the second quarterly drop in a row—And it turns out that it rose only 0.8 percent from the second quarter of 2010—Over the last year, hourly wages have risen more quickly than productivity 

Caption: To what have our behaviours given birth?

Here be the problem in grosser terms, my brothers and sisters. You can’t pay workers more than they produce, which is what a rise in wages in excess of a rise in productivity means on its face. Or at least you can’t do that for long. Declining productivity necessarily returns declines in wages, salaries, living standards, and revenues of all kinds, and at all levels. Tyler Cowen continues in his New York Times story titled The Sad Statistic That Trumps the Others

[…] Productivity slowdowns mean erosion of living standards over the long haul, and they also can lead to short-term crises. If productivity turns out to be much lower than expected, it often means that we have borrowed too much and taken on too much risk. Retrenchment can make a recession longer and deeper […] Read More »

objective process of de-globalization continues apace, contradicts White House Policy

Recall our beloved President’s plan to “export our way to stability,” and to call forth from the ethers a manufacturing renaissance by diverting productive capital to research universities and government agencies like the EPA on the basis of decisions returned by round-tables of “really smart folks”, and recall that the growth in the U.S. manufacturing sector over the past several quarters has been all an illusion, so these “policy proposals” are wish-projections void of positive content, based in silhouettes and shadows.

Caption: It was all a dream Read More »

Derek Thompson: “It’s hard to overstate how much today’s GDP report blew up our understanding of the recovery—The recession was deeper than we knew, and the economy is weaker than we thought—We weren’t making new jobs, because we weren’t making new things, period—The economy grew less than 1% in the first half of 2011”

[…] Yesterday, analysts thought the economy was expanding by 2.5% a year. This morning, they learned GDP grew by only 1.6% in the last four quarters. This is a remarkable discovery. It’s the difference between thinking we’re expanding at a decent, if disappointing, pace, and knowing we’re growing around half our historical norm, writes Derek Thompson in an Atlantic blog blog burst titled GDP Report Shatters Illusion of Jobless, Productivity-Packed Recovery

Caption: The so-called “Obama Recovery” was an illusion that fails to rise to the level of a clerical error Read More »

struggle against the U.S. consumer economy continues apace (ii): subjective experience of the new activism of the regulatory state to suppress consumer activity passes into social fact as U.S. CEOs vent their frustrations publicly

CEOs are beginning to appear in the media to denounce Washington, and in particular the White House. Does this indicate a trend line? Or: Are these few cases newsworthy at all because they are so unique?

Caption: The new consumer society consumes itself. 

Here be the CEO rants Read More »

New York Times not getting the whole production-consumption thing—David Leonhardt calls for the abolition of the consumer economy, which means the abolition of consumers, which means, you

Here be the context, my brothers and sisters:

Gloomy Goldman Sachs sees high unemployment, possible recession, writes James Pethokoukis in his eponymous Reuters blog

The economic indicators have all redlined. The new wisdom: No recovery before the decision to be delivered in the U.S. in November, 2012. Just the opposite is the case.

Caption: Exports! That’s the answer!  

Here be the solution according to the super-geniuses of the upper-strata of the U.S. Political classes, as represented in the New York times in “clichés” often issued by White House spokespeople, if not our beloved President himself Read More »

Chairman of the Federal Reserve, Ben Bernanke, to Representative Ron Paul: Gold Isn’t Money—Earth to Bernanke: You’re not paying attention

When money fails, its opposite—gold, the money-commodity—asserts itself. Gold as money-commodity in our era is the signal of a system reverting to simpler, baser forms, or de-complexifying. Gold as ground of value is a gross but reliable register of social, and political, regression, in the form of a collapse of confidence in the implicit contract between the political community and the civil society. This is what is at stake in the dialogue that took place yesterday between the Chair of the Federal Reserve, and Representative Ron Paul.

Caption: “Step by step, the world is edging towards a revived Gold Standard as it becomes clearer that Japan and the West have reached debt saturation,” writes Ambrose Evans-Pritchard Read More »

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