No Good News

THE BE YOUR OWN ECONOMIST ® BLOG Today’s Wall Street Journal (http://online.wsj.com/article/SB120403496764693703.html?mod=todays_us_page_one) splashed the headline “Decline in Home Prices Accelerates” across the front page. The subtext read, ”Fed’s Efforts Have Only Muted Effect On Mortgage Rates.” The accompanying article made clear that home prices are heading south while mortgage rates are going north. Not a happy combination. The week began with the National Association of Realtors’ February 25 report (http://www.realtor.org/press_room/news_releases/2008/ehs_homes_sales_slip2_25_08.html) that existing-home sales slipped again to a 4.89 million rate. If you update the chart below with that figure, you can appreciate the relentless slide. Existing-Home Sales (Click on chart Continue reading

The Fed Is Culpable

THE BE YOUR OWN ECONOMIST ® BLOG Tomorrow’s Wall Street Journal will run a story (http://online.wsj.com/article/SB120353316487980571.html?mod=hps_us_whats_news) on the release of the Federal Reserve’s minutes and the Fed’s continuing concern regarding the economy’s sluggish performance. Today’s CNN-Money web site published an article (http://money.cnn.com/2008/02/20/markets/morningbuzz/index.htm) on the possibility of recession in 2009, just in case we escape that misfortune this year. These articles sharpen our concerns over the economy’s performance, but don’t resolve the question of whether or not we’ll tumble into recession. But perhaps that’s not so important. After all, Japan’s economy suffered a decade of poor performance, stagnation and slow growth. Continue reading

The Sense Of An Ending

THE BE YOUR OWN ECONOMIST ® BLOG “The Sense of an Ending: Studies in the Theory of Fiction” is the title of Frank Kermode’s work of literary criticism. I’d like to borrow that title to frame today’s discussion of where the economy is now. There’s a tug of war going on between those who say we’re in recession and those who say we’re not. There are vested interests on both sides. People in positions of great authority say, “We’re not,” because they don’t wish to be blamed for recession or risk the chance of initiating a self-fulfilling prophecy. Critics of Continue reading

They Can’t Both Be Right

THE BE YOUR OWN ECONOMIST ® BLOG CNN reported on today’s testimony by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke: http://money.cnn.com/2008/02/14/news/economy/bernanke_paulson/index.htm?postversion=2008021412 The story began: “Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson both acknowledged problems in the U.S. economy Thursday, but both said they believe the nation will avoid falling into recession. “The two made their comments at a hearing before the Senate Banking Committee about the economy. Their testimony comes in the wake of troubling economic readings that have raised recession fears on Wall Street. “But while Paulson and Bernanke repeatedly insisted they expect the Continue reading

Self-Inflicted Wound

THE BE YOUR OWN ECONOMIST ® BLOG The news was so bad this week; it’s painful to review. Weak retail sales………credit-card delinquencies……..continued credit-market dysfunction…….stricter loan standards. It feels like a bad case of the flu is about to hit, and bed-rest plus medication (the stimulus package) won’t be sufficient to stave it off. Meanwhile, yesterday’s hero is today’s villain. Consider these book titles: “Bubble Man: Alan Greenspan and the Missing 7 Trillion Dollars” by Peter Hartcher “Who Shot Goldilocks?: How Alan Greenspan Did in Our Jobs, Savings, and Retirement Plans” by William Rutherford “Greenspan’s Fraud: How Two Decades of His Continue reading

Debt & Borrowing

THE BE YOUR OWN ECONOMIST ® BLOG Today’s New York Times (http://www.nytimes.com/2008/02/05/business/05spend.html?_r=1&ref=todayspaper&oref=slogin) carried an article calling attention to Americans’ diminished infatuation with debt and borrowing, and expressed the hope that Americans may begin to save once more. That of, course, implies reduced spending. Here are some excerpts from the article: “For more than half a century, Americans have proved staggeringly resourceful at finding new ways to spend money…… “But now the freewheeling days of credit and risk may have run their course — at least for a while and perhaps much longer — as a period of involuntary thrift unfolds Continue reading

February Publication Schedule & Web Sources

THE BE YOUR OWN ECONOMIST ® BLOG Here’s February’s tentative economic-indicator publication schedule, followed by a list of web sources. Future postings will discuss some of these indicators. You can use the WEB SOURCES listing to find the data on your own and read the accompanying press release. The addresses take you to the source’s home page and the steps tell you how to navigate the site. That way (rather than provide a direct link to the data) you can become familiar with these sites and find additional information on your own. PUBLICATION SCHEDULE February 2008 Source (* below)…………Series Description…………Day Continue reading