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Since Trump’s election, the US stock market has climbed unstoppably along a remarkably steep path to round off at a teetering height. Is this the irrational exuberance that typically marks the last push before a perilous plunge, or is the market reaching escape velocity from the relentless gravity of the Great Recession?
The Federal Reserve is, at last, acknowledging at top levels that its economists are completely baffled, its recovery is failing, that the Fed cannot raise interest and may even have to heat up its stimulants … or we may end up with a permanently scarred and stagnant economy.
The fate of oil companies and nations hangs in the balance of oil prices. Russia could go broke. Some think that’s by US design. Saudi Arabia could experience its Arab Spring if oil prices remain too low too long. And OPEC is dead. That’s the biggest news in this new century for oil. The House of Saud […]
And it isn’t because of their fancy math or their impenetrable jargon or even their arrogance. “We’re in a puzzling economy,” Shiller told Bloomberg TV. The kindly professor sounded genuinely befuddled, which left me wondering how an economist can be puzzled as to why the economy isn’t working when its flaws are more obvious than […]
Here’s a scary chart. Over the past three years, U.S. housing prices have risen as quickly as they did when the Federal Reserve was fueling the housing bubble with cheap and easy credit. That blew up in a housing market collapse in 2007-2009. Prices are also nearing the same peak price as their earlier crash […]
How long was it after Italy’s PM, Mario Monti announced that the euro crisis was “almost over” until it became a bigger crisis than ever? Within a month he found himself embroiled in the battle of his career against “Frau Nein,” Germany’s Chancellor Merkel, as the world watched the daily economic news articles out of […]
Here are the points you might want to take home with you from last week’s news. First, the stock market is not indicative of where the economy is going. For part of the week it was jumping up, and for part of the week, it was stomping down. Which part would indicate where the economy […]
When someone says we don’t need banking and Wall Street regulations because capitalism will correct itself, it’s like saying we don’t need a guard rail at the top of the cliff because the bottom will stop the car just fine. We have financial regulations because capitalism rights itself with a severe hand. Regulations are intended […]
I’m going to start posting a weekly recap of the economic news headlines. These headlines of news articles and their summaries come and go from the sidebar, so not everyone sees them on the particular day they tune in. This is a chance to make sure you didn’t miss any of the major economic news […]
Apparently, experts never learn. Larry Summers writes: “The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending.” (The Financial Post) What he really means is […]
The economy collapsed into a great recession because it was fundamentally flawed in the first place. The U.S. housing market, which underpinned the old economy, boomed because the government deregulated banks. The deregulation that began with Reagan widened under George Bush the First. It widened a little more under William Jefferson Clinton, and it broadened even further […]
News of the housing market collapse hit hard at the beginning of spring on March 23rd, 2011 because reporters had spent the winter months with their heads in the tropics so missed the winter chill. All winter the media experts reported the good news that their vaunted industry experts fed to them like peeled grapes in […]
At the start of the fourth year of the Great Recession, people were ready to hear good news, and the press glibly passed along any ray of sunshine they could find without ever questioning it. Here is one example. On January 28th, 2011, I wrote the following observation to my friend Stan about the […]
The Congressional Budget Office recently announced that the United States will be running its first trillion-dollar deficit this year — $1.2 Trillion if we count the pocket change. That’s about three times more than it’s been in any other year. Most Americans seem ready to agree with congress that this is necessary in order to […]